Wotif Marketing Enviroment

1.1 Industry definition



Wotif.com Holdings Limited (WTF) is a source of online accommodation, activity and flight booking services in Australasia. The company represents over 14,000 properties in more than 35 countries with its headquarters in Australia and offices in New Zealand, UK, Singapore, Thailand, Malaysia and Canada, Wotif.com Holdings Limited (Wotif.com or the Company), operatesa virtual marketplace that brings together accommodation suppliers and customers offering the biggest variety of accommodation options at competitive rates relative to the online competitors. The company has well-known customer base that is separated between unmanaged business travelers and a few days’ away leisure travelers. The cost savings delivered by the Wotif.com business model, togetherwith the convenience, ease and extensive range of accommodation offered are the key customer benefits. (Wickramasekera, R and Mathews, S. 2007)

Wotif.com’s low-cost and highly focused operations have constantly generated strong revenue and earnings growth since the Company commenced operating in 2000. Suppliers are able to place their accommodation inventory on the website at no up-front cost.Customer’s book accommodation selected from the website and pay by credit card at the time of booking. There is a deduction margin from the total value of the booking sold through the website and charge for booking fee. Wotif.com also receives income from administration fees charged for date changes or cancellations to bookings. Under the terms of trade with suppliers, suppliers are paid within 30days of the end of the month in which the customer stays. The deduction margin charged compares positively to commissions charged through traditional distribution channels, such as travel wholesalers and offshore online competitors. (Wotif.com, 2008).

WTF provides a market place for accommodation suppliers and customers. WTF takes a
commission on the value of the accommodation booked but doesnot carry inventory itself. The income also comes from upfront payments which allow them to hold before payment. This allows them a highly leverage interest return on someone else's capital. Future growth in bookings will come from increased share of online accommodation bookings, as well increases in WTF market share. WTF is the market dominant player with an estimated 36% of the Australianaccommodation online-booking market (Wotif.com, 2008). A self-enforcing dominant position allows WTF to starve its competitors of inventory, but only if hotels are content with terms. Superior layout and ease of use has been a large reason for WTF success. Competitors have already mimicked the layout. WTF must rely on it head start in brand recognition and build on this. Customer eyeballs are effectivelyWTF´s key asset, servicing hotels. The greatest barrier to entry remains name recognition.

Holding the dominant position in online hotel bookings in Australia WTF is looking to expand its offering into flights, hire cars, vacation packages, and other travel/accommodation related areas.




1.2 Critical Success Factors

An industry's set of characteristics define its own Critical SuccessFactors (Gretzel, N. ‘et al’ 2004). For WTF one of them is integration, each of the systems should be as integrated as possible and should represent a "one-stop" shopping experience for the potential customer, this will require hard work in standardization among the different suppliers, in terms of data, functions and organizational procedures. Currently potential tourist must use manuallynumerous independent web sites in preparation for their trip, register their personal and important information multiple times in this web sites, waste hours or days waiting for response or confirmation either automatic or personal, and make multiple payments by credit card. Customers are discouraged with the lack of functionality and personal contact (Hashim, H., Murphy, J., & Law, R. 2007)....